Tags containing: "subscription models"

Why Skift is putting reader revenue in the pilot’s seat

July 7, 2020 Esther Kezia Thorpe – Independent Media Reporter

Travel industry intelligence site Skift has become the latest publisher to put membership at the forefront of their business. CEO and founder Rafat Ali announced the launch of Skift Pro on Twitter, saying that “Skift is now officially a Subscription-First business information company.”

Skift is now officially a Subscription-First business information company…
— Rafat Ali, Media Operator & Dad (@rafat) July 1, 2020

Skift joins a growing number of publishers turning to reader revenue as a way to diversify revenue streams and mitigate the impact of the coronavirus pandemic on other aspects of the business like events and advertising.

We spoke to Skift co-founder and Chief Product Officer Jason Clampet about the details of the launch, how it sits alongside its other products, and why this is such an important shift for the niche travel publisher.

Laying the foundations

Skift Pro has been in the works for over a year. The publisher already has two existing subscription products: Skift Research, which does deep-dive reports, data and analysis on travel industry trends, and Skift Airline Weekly, a subscription product dedicated to aviation news and analysis. The two products were faring well. However, Skift had een eyeing examples from other B2B companies like Digiday and Business of Fashion, which made subscription models a more central part of their strategy to build business resilience.

The first task the team had to tackle before adding another subscription product into the mix was to bring everything into one payment platform. “We built our own database to store users and details about the payment process so that everything was seamlessly tied together,” Clampet explained. This meant that subscribers to multiple products would be able to manage their subscriptions in one place.

In the last week of February 2020, Clampet held a big team meeting where he walked everyone through Skift Pro. In particular, he told the team how excited they were to be launching it on March 16th. But March 11th would be Skift’s last day in the office.

“We decided not to launch Skift Pro at that point,” said Clampet, aware of the potential scale of lockdown disruption to the travel industry. “Instead, we did a Guardian-style contribution model. We said, “Hey, we’d love direct reader support. You can make a one time gift or a recurring gift.””

Spurred by the success of the contribution model, Skift then introduced a ‘Pay what you want’ model to their new online events and webinars, using the payment system they had built to support subscriptions the previous year. As the initial shockwaves of the pandemic settled, Skift Pro’s launch moved to the top of the agenda.

Membership benefits

Despite the initial delay, Skift’s decision to launch a membership product marks an important shift in the publisher’s relationship with its readers. Rather than simply adding another revenue stream into the mix, Skift Pro will help build business resilience and audience engagement, as well as strengthening their editorial work.

“It’s become a centerpiece of how we think about our readers and customers,” said Clampet. “Hopefully it’ll be a much more significant part of our revenue, but it’ll also allow us to tie things together better.”

Clampet believes that Skift Pro members will be more deeply engaged with the brand, from attending events to reading its analysis and reporting. In turn hopes that he and the team will be able to learn more about them. “It’s a way for us to have a better insight into who our users are, and then serve them better,” he explained.

This plays a key part in the presentation of Skift Pro as a membership product rather than a straightforward subscription. Skift Pro goes beyond just access to stories online. It includes additional content and events, as well as a custom newsletter which will start up in August, for $365 a year, or $1 a day.

“We want it to be more than just a newsletter in your mailbox every day. It’s about being actively engaged with other things beyond just reading,” Clampet said.

Launching in a pandemic

Following the delay, deciding when was a good time to finally launch Skift Pro was a subject of much internal discussion. Skift’s other major revenue streams are from its content studio, which works with travel brands to develop bespoke content for them, and its events. Both have suffered as a result of coronavirus, making reader revenue a more urgent consideration. But the travel industry as a whole is also under immense pressure, with many furloughed or laid off.

“It’s hard to know what is a good time right now for anything,” Clampet explained. “The reality of business is that direct from consumer revenue is vital to just about any media business.”

“We also know that the people who are still at companies in Europe and Asia, which is waking up again. They need actual information to do their jobs better and make smarter decisions. We’re still here providing that, so in that sense, it is a good time [to launch].”

A new route

Skift Pro may be live, but the team aren’t resting on their laurels. Clampet’s main goal for the membership is that people are really happy about their decision after signing up, and that is going to require some changes to the product as time goes on.

“The launch is just the very first phase for us. We need to be constantly evolving the product experience,” he emphasised. “What it is right now is going to be very different from what it is a year from now, and hopefully we’ll have made a lot of smart decisions.”

This is a very important lesson that other publishers with subscription or membership products can learn from. For Skift, the launch is not the end of the road. It’s the starting point of a product which will change and grow as they focus on the reader response, and how they can best serve those needs.

Featured Post | Revenue

In the battered news industry, are nonprofits best equipped to survive?

April 16, 2020 Kasia Kovacs – Independent Journalist

Over the past decade, the nonprofit news model has offered some hope while traditional news outlets struggled to keep afloat. Without the need to rely on advertisers and instead making money through fundraising and memberships, nonprofit news outlets have proliferated.

But recently, that hope has flickered. The worldwide Covid-19 pandemic, or coronavirus, triggered a tsunami to batter an already troubled industry. With advertisers losing money and pulling ads from news outlets, media companies are furloughing and laying off workers. And, in some cases, publications are being shut down temporarily or entirely.

How will nonprofit news outlets fare in the face of this pandemic and the economic downturn that follows? Perhaps better than traditional news outlets. New York Times columnist Ben Smith went so far as to advocate letting the for-profit model fail while supporting nonprofits instead. However, even with booming readership and engagement, nonprofits are concerned about how an economic recession will affect donations and fundraising, and ultimately, their future.

The promise of nonprofit news

Traditional news outlets began wrestling with declining revenues long before coronavirus spread throughout the world this winter. Although digital traffic has either increased or leveled off, advertising revenue continues to fall. Pew Research Center’s most recent State of the News Media Report found that ad revenue dropped by 13% from 2017 to 2018, continuing a trend that began in the early 2000s.

Further, the number of newsroom employees in the newspaper sector was essentially cut in half from 2006 to 2018. The number of newsroom jobs dropped by 36,510, according to the Pew report.

But nonprofit news organizations sketched a different picture of the future, offering the news industry a sense of hope. “It may be one way to start to repair the loss of trust in and public engagement with journalism in North America,” wrote University of British Columbia associate professors Alfred Hermida and Mary Lynn Young in Nieman’s predictions for journalism in 2020.

Journalism philanthropy quadrupled over the past decade, according to a 2019 Media Impact Founders report. Today, more than 230 nonprofit media organizations are members of Institute for Nonprofit News (INN), an organization that began with 27 members in 2009. Over two-thirds of INN’s members have launched in the past 12 years. INN’s members also employ about 3,000 staff, including 2,000 journalists, according to the organization’s 2019 Index.

Nonprofit strategies

These nonprofit outlets have provided necessary and often resource-heavy journalism that newspapers with dwindling funds might struggle to take on, especially watchdog and investigative reporting. Many nonprofit organizations cater to local audiences or report on niche topics, such as gun control, the environment, or education.

Certainly, many nonprofit news outlets earn some revenue from advertising and corporate sponsorships. However, these organizations rely most heavily on memberships and donations from individuals, families, and foundations. In the past, foundations provided the majority of the funding for nonprofits. However, the 2019 INN Index found that individuals and families contribute now about 40% of nonprofit funding. That same year, foundation funding dropped below 50% for the first time.

Even some for-profit news organizations have integrated strategies from the nonprofit model. The Guardian made an operating profit in 2019 for the first time in two decades after pulling off a financial turnaround strategy. This was, in large part, thanks to donations from more than one million readers.

And, faced with furloughs and possible layoffs, Vox Media is trying its hand at soliciting support from its audience. Emphasizing its wish to eschew the subscription model and keep its journalism freely accessible, particularly at this time, the company is turning to readers for support.

Of course, nonprofit outlets have not been the deus ex machina to single-handedly save the news industry. Journalism scholars have pointed out the shortcomings of a nonprofit business model. These include the risk of catering to elite donors rather than publishing stories for a wider audience. Larger nonprofits also tend to fare better than smaller organizations, which may struggle to raise enough funding.

Enter the pandemic

When coronavirus spread — first to Asia, then Europe, and then the U.S. — it dealt a serious shock to the news industry. Digital traffic to news websites increased significantly, with anxious visitors reading about the growing number of coronavirus cases, troubles with virus testing, and best practices for health and safety.

Despite this boost in page views, advertisers faced with their own losses have hit the brakes on many ad campaigns. They’ve also intentionally reduced the number of ads on digital news websites due to concerns about appearing next to coronavirus news. Buzzfeed News found that advertisers stopped over two million ads from showing up on news sites in the first three weeks of March.

As a result, Gannett is furloughing journalists at local newspapers across the country. Euclid Media Group announced layoffs at its seven publications. Some alt weeklies have shuttered entirely. And with economists predicting a global recession, the long-lasting repercussions of the pandemic look dire.

Traffic climbs

Nonprofits have faced consequences too, although they haven’t been so catastrophic.

High Country News — an independent magazine based in Colorado has maintained its nonprofit status for decades. Like many other news sites, it has seen a considerable increase in online readership of late.

Although the magazine normally publishes articles on issues relating to the western U.S., HCN assigned a team of about 10 journalists to focus on COVID-19. Stories shared details about the dangers of self-isolating on public lands, how to ethically get outdoors, and how rural doctors face the virus.

“Every story that we’re putting out on COVID-19 has just blown up. There just seems to be a huge appetite for those stories,” said Paige Blank, associate editor at HCN who is now leading the coronavirus coverage at the organization.

The number of users in March rose about 48% compared to the same time last year, and the number of new users also increased by nearly 53%. Plus, visitors are not just reading stories, but also becoming more engaged.

“The tip form has been getting a ton of responses from our readers,” Blank said. “We’re actually able to gauge what people are worried about right now. And we’re using those tips to tailor our coverage for our readers.”

But will revenue follow?

But whether that traffic and engagement can translate to sustainable revenue is unclear. So far, HCN hasn’t seen an uptick in donations in March. The magazine hopes to harness the traffic by launching an online fundraising campaign in late April, said Laurie Milford, development director at HCN.

Still, the magazine delayed a 50th anniversary campaign which it expected to raise $10 million this year. (The campaign gala is now scheduled for June 2021.) Overall, HCN expects to see a 25% reduction in general fund receipts in 2020.

HCN’s predicament is pretty representative of what most nonprofit organizations will be grappling with in the coming months, according to Sue Cross, INN executive director and CEO.

“It’s a mixed picture, she says. However, the situation “appears quite a bit better than the situation for for-profits,” Cross said. “(I’m) hearing of really significant increases in individual donor support. But some others that had a lot of events/sponsorship revenue or advertising income are hurting… For most, their community position and funding are up now, but uncertainty remains about future grant funding.”

Not all bad news

When it comes to for-profit news outlets like the Guardian, which also largely rely on reader donations, reader contributions could potentially act as a sort of cushion, softening the pandemic’s severe financial blow. However, thus far, it’s unclear how much of a difference reader donations will make.

In March, the Guardian received about 2.17 billion page views, far bypassing its previous record of 750 million pageviews last October. And the increased traffic appears to be increasing financial support from its online readers, according to editor-in-chief Katharine Viner. However, mid-March the Guardian announced a projected a loss of £20 million over the next six months from declining advertising and newspaper sales, which has led to furloughs and pay cuts.

Indeed, many news organizations hope that readers will see the value of their coverage during the coronavirus crisis and, despite the economic uncertainty, donate. Case in point: Chalkbeat, a nonprofit that focuses on education news in cities like Chicago and Detroit, gained $1,700 in just one week after an appeal for financial contributions

Chalkbeat has focused its reporting over the past month on how schools are dealing with the pandemic. Traffic tripled in March, according to figures from editor-in-chief Bene Cipolla. Like at HCN, Chalkbeat readers have been involved in spurring content; by the end of March, Chalkbeat had published 20 stories based on the responses to callouts asking for reader questions.

Instead of running its annual spring campaign, the organization is treating the COVID-19 crisis as a campaign unto itself. This means sending out weekly appeals, which resulted in significant donations and 21 new members after one week, according to Kary Perez, senior marketing manager.

Community engagement

In addition, “we have also been approached by lots of people asking us to come to their communities,” said CRO Maria Archangelo. “When they see the kinds of information that we are able to deliver to Detroit and Memphis, they realize what their communities are lacking.”

The future is less certain when it comes to Chalkbeat’s philanthropy partners and major donors, who are dealing with the pandemic consequences on their own terms. Archangelo hopes that donors and funders will realize the importance of Chalkbeat’s coverage once the pandemic has passed, and will continue to provide funding.

For Chalkbeat, HCN, and all other nonprofit news organizations, it’s difficult to calibrate the full impact of COVID-19. But for now, compared to the rest of the news industry, nonprofits seemed to have maintained a level of resilience in the wake of coronavirus’ brutal blow.

Featured Post | Revenue

The state of news subscriptions – and a newsworthy approach worth considering

December 12, 2019 Chris M. Sutcliffe – Independent Media Reporter

Doggedly following the pace of the duopoly and facing falling print revenue, they anxiously watch as an increasing number of rivals drop out. And let’s face it, the route has only continued to slope uphill.

The next great hope is in digital subscriptions. Over the course of 2019, revenue growth was strong for many of the larger publishers that have been investing in subscription marketing and retention. The New York Times – effectively the poster child for news subscription success – reported its highest ever subscriber total in August: 4.7 million paid subscriptions across digital and print, of which close to 3.5 million are digital. Times’ CEO Mark Thomson said: “We’re making steady progress toward our goal of reaching 10 million total subscriptions by 2025.” A big part of that, as we’ve previously reported, is by converting young people to paid subscribers.

Meanwhile, the Guardian achieved its ambitious break-even target of financial stability by mid-2019, as 655,000 regular monthly supporters and a 300,000 one-off contributions buoyed their balance sheets. This suggests that readers do not necessarily even expect exclusive content to pay what is effectively a subscription in all but name. Similarly, Wired has claimed success after introducing a paywall in 2018, announcing a 300% increase in the number of digital subscribers.

Nor do the titles need to be international in scope to make successes of paywalls: a few years after launching a digital subscription the Shawnee Mission Post has over 2,500 subscribers. That’s more than enough for a local title that employs three people full-time. In the UK, too, more regional titles are launching paywalls as well. Some of JPI Media’s newspapers with larger circulations are currently trialling paywalls, too.

Overall, WAN-IFRA’s World Press Trends report found that: “Digital news subscriber numbers worldwide have increased 208% over five years to 2018 and are expected to grow by a further 13% in 2019.”

Smart paywall strategies

Small wonder then that so many news publishers are following the leaders and attempting to make digital subscriptions a larger part of their business strategy. There are countless examples of investment into smart paywalls, better retention efforts, and into data tools designed with the sole intention of signing up users.

That’s not to say that erecting a paywall is a guarantee of survival. Joshua Benton’s in-depth look into the L.A. Times’ disappointing subscription results in July makes it clear that if even one of those areas of investment is neglected, the result is that a publisher can be left running in place. They face failing to sign up sufficient subscribers or worse, a loss of existing ones.

A fear of fatigue

But the real shadow that falls across any conversation about paywall success is the term ‘subscription fatigue.’ Despite encouraging signs that readers have not yet reached this critical tipping point, the worry looms large. Essentially, it’s the tacit acknowledgement that audiences only have so much disposable income, that people are far more likely to subscribe to multiple entertainment products than a single news one, and that the people who have already subscribed were effectively the low-hanging fruit.

That last point was referred to in Wired editor-in-chief Nick Thompson’s one year paywall retrospective. He said, “We don’t know if they’ll resubscribe (please do); we don’t know if they’ll ultimately pay higher prices (please do); we don’t know if it’ll be as easy to get the next batch of people to join (please do).” Of those concerns, it’s the latter which is the most pressing.

Who pays?

In the UK, for instance, only 7% of people currently pay for a digital news subscription (a tiny increase over the previous year). On the face of it, that gives publishers a lot of headroom for growth. However, they’re up against competition for finite disposable income with entertainment services like Spotify, Netflix, Disney+, PlayStation Plus, etc. According to the latest Ofcom Media Nations report, for instance: “Netflix, Amazon Prime Video, Now TV and Disney Life – increased from 11.2m (39%) in 2018 to 13.3m (47%) in 2019.”

That’s broadly in line with other findings, which demonstrate that people are far more likely to prioritize entertainment content over news. In fact, WAN-IFRA found that younger people – on whom many publishers are pinning their hopes – are less likely to prioritize a news subscription: “Just 7% of under 45s would pick news over everything else for the next year, compared to 15% of those 45 and over.”

What is news?

With relatively sluggish growth for news subscription numbers and the implication that it is seen as a luxury for young audiences, can publishers combat the potential “subscription fatigue” among audiences and prove they are as vital as an entertainment subscription? For most audiences, the reality for the foreseeable future is that entertainment will be prioritized. So, is it just that publishers need to reappraise what a successful ‘news’ subscription looks like?

A report by researchers at the University of Minnesota’s Hubbard School of Journalism and Mass Communication, in collaboration with the News Media Alliance and the Star Tribune, found a positive correlation between people’s willingness to pay for entertainment and news. Their findings suggest that people’s increasing willingness to subscribe to entertainment is a tide that floats all boats.

It follows, then, that the way younger audiences think about subscriptions to both entertainment and news is similar. And, ultimately, they want unique content in a format that suits them best.

Bridging the divide

For instance, a paid-for subscription to something like a news podcast could help close that divide between entertainment and news. Media analyst for the Reuters Institute for the Study of Journalism Nic Newman recently told me: “Publishers are really finding it hard to reach and engage with younger audiences. It’s not ‘news’ [that’s the problem], it’s about how you create content that is interesting, engaging, fun… But is also meaningful, and to me that’s where the daily news podcasts are hitting all those spots at once.” Notably, NYT CEO Mark Thompson has discussed spinning its flagship title The Daily off into a paid-for product in its own right.

In France, Le Monde is experimenting with a blend of news and entertainment content, with its three new podcasts being explicitly in service of squaring that circle. As Digiday’s Lucinda Southern notes: “French news publisher Le Monde has launched three podcast series adapted from investigative articles that have been successful at driving high numbers of new subscriptions.”

Subscription plus

So, it’s still vanishingly unlikely that every large-scale news publication will be able to sustain themselves through subscriptions alone. Many are already investing in non-news products to attract people to the top of the funnel. It’s also true that the first ones out of the starting blocks have an early mover advantage.

None of that is to say that news publishers should give up and transition entirely to entertainment content. Instead, they should be considering that the young people on whom much of their subscription success or failure rests are demonstrably interested in news content. Unfortunately, the vast majority of how that is currently presented on doesn’t necessarily convert or retain them.

Rather than attempting to push the fast news-based content that adds value once people are past the gate, publishers need to re-evaluate what types of content will lure younger audiences through in the first place.

Industry-Research

Publishers have reevaluated their platform relationships

December 10, 2019 Rande Price, Research VP – DCN

As 2019 comes to an end, we see that publishers have reevaluated their relationship with technology platforms. According to the Tow Center for Digital Journalism’s new report, Platforms and Publishers: The End of an Era, news publishers no longer expect scale and ad-based platform products to earn significant revenue or bring audience growth. Publishers recognize that monetizing traffic from posting a news story on Facebook is not a sustainable business model. Tow’s year-long research included 42 interviews with individuals from 27 news organizations (representing national and local outlets, national and local digital natives, broadcast, audio, and magazine), six platform companies, and one foundation.

Selective partnerships

According to the Tow report, this new publisher sentiment is a complete departure from a year ago, when publishers were still hopeful about partnering with platforms to help sustain the news business. Today, publishers report that they are examining internal business strategies and the rise of reader revenue to further revenue diversification (e.g. live events and podcasts) to regain control of their audiences.

Publishers are thoroughly assessing which platforms fit their needs best and identifying the necessary requirements for the platforms to meet. Tow’s research identifies four key explanations as to why publishers are more selective today about platform partnerships. They:

No longer feel they are missing out if they choose not to partner with a platform
Have seen insignificant return on investment from previous platform partnerships and products
Better understanding of the extensive integration costs and expense of supporting third-party products
Have greater recognition of the conflicting business models between publishers and platforms

Little fanfare for new platform products

Publishers note that platforms are closely following subscription growth in the marketplace and now offer their own subscription products. Last year Apple announced and launched Apple News+, a magazine and news subscription service at $9.99 a month. In their deal with publishers, Apple takes 50% of the revenue and the remaining is left to be divided among participating publishers.

Google rolled out a product called Subscribe with Google (it takes in the range of 5 to 15 percent of the revenue); and Facebook launched a paywalled version of Instant Articles. However, unlike previous rollouts of similar offerings, these overtures received little fanfare from publishers.

Platforms investment in relationship

Further, publishers recall Google’s and Facebook’s “goodwill initiatives” to help build stronger relationships with news publishers with healthy skepticism. In January 2019, Facebook committed $300 million to local news projects. In March, they kicked off with their first local news summit as an effort to address newsroom operations. At the same time, Google announced its commitment to local news and started a boot camp for eight local subscription publishers.

Then in May, Facebook announced that it was bringing its Digital News Initiative stateside by funding projects to help generate revenue and increase audience engagement for local news. And, in September, Facebook awarded “Community Network” grants, to support initiatives that connect communities with local newsrooms. Even with these significant investments (in the range of $1.0 billion in total) publishers remain very skeptical about the platforms’ commitment to journalism.

Publishers reinforce the basics

Publishers think a lot about the future. Undoubtedly, the platforms and their role in the online information ecosystem cannot be ignored. As seen in the Tow report, publishers present their new awareness in pragmatic terms. They are regaining control of how they publish and how they bring in revenue. Importantly, while publishers are not abandoning the tech platforms, they are much more carefully evaluating platform products in terms of business models, audience growth, and the editorial relationship.

Innovation

The Atlantic ventures into new digital waters

November 21, 2019 Erik Martin—Independent Journalist

When you’ve been in the publishing business since 1857, you can rightfully say that you’ve learned a thing or two about longevity and how to make a product continually appealing to ever-changing consumers. The key to maintaining that allure today, apparently, is to make things look simple without losing your sophistication. For The Atlantic, that means taking an A-to-Z approach, beginning – literally – with a capital “A” and ending with a close eye on Gen Z, your future readers.

Investing in growth

To better compete for eyeballs in an increasingly digital world, the publication recently undertook a significant redesign of its magazine, website, and iOS app and rolled out a new digital subscription service. To support these initiatives, the brand made several prominent new hires, including creative director Peter Mendelsund, senior art director Oliver Munday, and director of photography Luise Stauss. And over the past year, the product, engineering, and growth teams were doubled.

The results so far have been promising. September and October both drew record numbers of subscribers—more than double the number of subscriptions and revenue originally forecast. The website now tallies 30 million unique visits monthly and the magazine boasts a paid circulation of 500,000. And in the five days following the redesign rollout, The Atlantic had twice the number of subscribers daily, on average, as there were in the same period before the redesign.

New look, same savvy

Readers who visit the website or use the app today will likely take instant note of the streamlined design and sparse template at work. A bold red “A” logo has replaced the title’s previous iconic emblem. The words stand out consistently in a clean new custom typeface. Clustered or crowded content is a thing of the past thanks to a generous infusion of white space. And the top navigation bar is a simplified element better served by a hamburger menu icon in the upper left corner.

But what hasn’t changed, insists Adrienne LaFrance, executive editor of The Atlantic, is the quality writing, diversity of content, and journalistic integrity. “The way we will continue to stay competitive is by showing people how we are different than other publications—reminding them of our extraordinary writing, unmatched narrative journalism, beautiful design, and photography,” she says.

“Were lucky because we have a really differentiated and highly valuable product that people already love and have loved for a long time. But it was time for a redesign, with a focus on giving people the best possible user experience and helping them get to the best of our work even more easily.”

Mobile matters

First introduced in 2011, the improved iOS app (plans are afoot to launch an Android version) is designed to function as a compact version of the print magazine while retaining the cleanly legible look and unconstrained feel of the website. A dedicated editorial team exclusively manages the app, which has more carefully curated and diverse offerings for subscribers, thanks in large part to its Today feed.

“The Today feed walks the reader through what’s happening but gives them deeper context behind the news – stitching together the larger patterns so people can derive meaning from the day’s events. There’s a narrative arc there, not just a list of bullet points or headlines. There’s definite value for people who want to come away with a complete and rich sense of what’s going on in the world and why it matters,” LaFrance explains. “You can choose how deeply you want to delve into the feed, whether you want to read every single story or browse through it. The app and entire feed are free. Where you encounter the need to subscribe is when you click through to a particular article.”

LaFrance notes that the app and website are two distinctly different products. The mobile experience is focused on making it simple to brush up on the news of the day and discover articles of interest to on-the-go users.

“We want to respect people’s time and intelligence, and we understand that there are so many different options for getting information and reading. We know people come to The Atlantic for extraordinary journalism. And we want to make it easy and delightful for them to experience our stories,” she adds.

While she couldn’t yet disclose numbers post-revamp, LaFrance says that, historically, The Atlantic’s mobile app audience was a fraction of its overall digital audience. Previously, “in any given week, about three-quarters of subscribers who used our existing app came three-plus times per week,” she notes.

New routes to revenue

Simplifying the subscription model was another priority. Now, readers can opt from three tiers:

Digital ($50 annually, which includes unlimited access to TheAtlantic.com, the iOS app, digital issues, and a subscriber-only newsletter);
Print and digital ($60 a year, which comes with the aforementioned plus delivery of 10 print issues); and
Premium ($100 annually, for all of the above goodies plus exclusive access to podcasts, ad-free web browsing, a complimentary digital gift subscription, Atlantic product discounts, and priority access to exclusive events).

Subscriptions and print advertising serve as complementary pieces of the monetization pie (comprising approximately 20% of revenue). However, the lion’s share comes from digital advertising (45%). The remainder is derived from various sources, including live events (like The Atlantic Festival, Future of Work seminar, and Aspen Ideas Festival 2020).

“It’s actually a wonderful time to be a publisher because the incentives for the highest-quality journalism and what journalists want to make are aligned with what readers are willing to pay for. So, we can be incredibly ambitious knowing that the highest quality product is what people will want to subscribe to,” LaFrance says. “I think one of the reasons The Atlantic has remained so urgent and relevant for 162 years is that we’ve been really aggressive about diversifying revenue and one of the first media companies to demonstrate extraordinary skill in the live event space.”

That’s not to say the waters won’t be choppy ahead.

“This is an intensely competitive environment. That’s not just among publications and magazines but in the way people spend their time nowadays – from Netflix to TikTok to Instagram to news organizations. There is no other publication out there like The Atlantic, and that’s why we’re having so much success with our subscriptions,” she continues. “But the key for us going forward is making people understand what makes us special.”

Eye on the horizon

LaFrance, who joined the company in 2014 and served as its website editor for years, lives by an important credo: Nothing is guaranteed, especially in the world of digital publishing.

“No publication has a right to survive. You have to really serve your readers. That means doing the best quality work and finding the places where your readers are so that they can connect with your journalism, fall in love with it, and keep coming back.”

While mum on the details, LaFrance hinted that other exciting changes are coming soon to The Atlantic’s digital offerings. Right now, her team is focused on further perfecting the digital user’s experience and gauging reaction to the redesigns.

“We’ve done a lot of audience research and looked closer at how people are finding our stories, what they like, and what they are excited about on our site. All of that has been factored into our editorial thinking process. So far, the feedback has been overwhelmingly positive, almost to the point where we’re waiting to learn what we can do better.”

Perspectives | Revenue

Build paywalls, and people will dig holes

September 17, 2019 Jon Fletcher, Content Editor – Marfeel

People used to be loyal to a single publisher. They paid for the content then and there (or were longstanding subscribers). And they didn’t even notice stories from other publications. It’s frustrating that online content consumption hasn’t work in the same way. But the same system that brought about the democratization of online content also broke publisher loyalty.

Suddenly, consumers had access to numerous content platforms. The barriers to entry lowered and smaller, niche publications could reach a global audience, adding multiple views to the same angles. This meant people got used to judging by the story rather than by the publication.

Paywalls should work as a logical solution to monetizing online content. And paywalls do function as a way to pay for content. However, they don’t account for the way the majority of online users actually consume content. They can be an inflexible solution in an environment that changes daily.

That’s why publishers need to consider paywalls as one element of a wider monetization strategy.

Paywalls turn away 98% of users

The formula for consuming content used to be: Seek out a source of content you trust or enjoy—such as a newspaper. Now online content producers have to find, and fight for, audiences. Through media aggregation and search platforms, news competes with other versions of the same story for reader attention. Now users don’t have to choose just one publication and stick with it. Information is everywhere. This has led to to consumers having a distributed, fragmented web of content sources.

For hard paywalls to work as a primary monetization system, publishers must possess (or build) a formidable audience based upon a strong, trusted brand. Many readers will only pay for content they know they can’t get anywhere else. Major media brands have the resources to offer this. But even then, the many readers are going to look elsewhere for content, particularly if they hit a paywall and feel they can find good enough information for free.

Speaking at a publisher conference, Marfeel CEO, Xavi Beumala described the problem of scaling a paywall model. “Even in the US market of 330 million, the total amount of business you have for a subscription model is always capped. You can’t scale it ad infinitum.”

The generations that are loyal to a single media source are dying out.
Subscriptions may work for the New York Times. However, the New York Times is using the fuel of the reputation it took 100 years to build (not to mention a significant investment in its technology and delivery). Without new readers experiencing the quality of their output, some question whether this model continue to sustain the brand for another 100 years.

Other media groups, such as The Guardian, have bucked the trend with a voluntary subscription basis that doesn’t wall-in content. This model relies on readers wanting to support the business and see it continue to operate. Again, brand strength and reader trust and value are big factors here.

Netflix for news

Content aggregation platforms represent a further hurdle for publishers that want to paywall their content. Several big tech companies have announced plans to deliver news and entertainment from multiple sources in their own subscription platforms.

While publishers will be able to negotiate payment rates that allow their paywall-segregated content to appear in aggregated content platforms, these deals will always favor the major tech companies over the publisher. It’s not hard to imagine these companies also downgrading search results or newsfeed positions for any content that has a paywall—that they don’t operate. Facebook, Apple, and Google don’t want to direct users to content or a search query only to have that user bounce back from a hard paywall.

The arrival of these news platforms also offers further competition to the paywall model, one that has a real chance to further disrupt publisher loyalty. Consumers may hedge their bets, possibly choosing to pay more to see content from multiple sources than tethering themselves to a single subscription.

Easy to get into, hard to get out

Google’s latest Chrome update was an example of how the ecosystem is built around a handful of major technology providers, and small changes can cause major disruption. The update in question prevented publishers from detecting if users are browsing in incognito mode.

Intended or unintended, the consequence of closing this loophole meant that many publishers’ metered paywalls were no longer effective. When readers hit their article limit they can switch to incognito mode and instantly reset their meter of free articles.

Publishers suddenly found that their paywall solution was ineffective, in one single stroke from Google.

Distributing monetization

A lack of resources to build technology means that some publishers bet all of their chips on a single strategy. And, for some publishers, paywalls represent a functional option with a guaranteed level of revenue.

But paywalls can be a blunt and imprecise tool. They cut off the majority and work for a minority. With a paywall, you often close the doors to new readers and rely on a core of hyper-engaged users. These readers are effectively paying for the loss in traffic that the paywall creates. It also insulates content in a world where sharing and exposure are the oxygen of publications.

Using different sources of technology, publishers are now able to deliver a layered monetization strategy that meets the needs of different readers, different content, and different stages of the engagement journey. Technology that implements programmatic, direct, paywall, subscription, micropayments and more will empower readers to build tailored packages. Like GDPR, readers will be able to select their preferences based on their needs.

A small percentage of readers will want (and pay for) a dedicated, personalized, ad-free experience. For these readers, a hard paywall with a personalized experience is the perfect solution. A far larger subsection of the audience will accept advertising in return for content that is free at the point of purchase.

Broad multitudes within this grey-area will sometimes pay, sometimes won’t. They won’t accept recurring transactions or fees and will need the process to be frictionless. For the first time, mid-size publishers will be able to out-pace major media groups that are forced to develop bespoke solutions, banking on only the most profitable.

More technology and monetization platforms are being democratized and made available to mid-sized publishers. With a sliding scale of monetization options, they will finally have the ability to reflect readers’ stage in the process, capture new traffic, and give readers options that will build a longer-lasting connection with their brand.

Innovation | Revenue

Given Google Chrome’s “incognito” update, it may be time to rethink your paywall strategy

September 3, 2019 David Gosen, CCO—Cxense

Google’s launch of version 76 of Chrome fixed a loophole that previously allowed publishers and other site owners to detect readers who were browsing in incognito mode. Aside from this loophole having serious privacy implications, a consequence of closing it meant that many publishers suddenly found their paywalls unlocked. WNIP estimates that as many as 33% of paywalls could have become unlocked due to the update.

Undoubtedly, paywalls are an important revenue model for many publishers and site owners. And given that Chrome has a market share of 64%, the impact of this update is widespread because it makes it easier to bypass paywalls by simply opening a page in incognito mode.

The talk of paywalls – and their relative strengths and weaknesses – makes this a good time to give some thought to your paywall strategy. Here are some different types of paywalls and how they may or may not be affected by Chrome’s latest update:

1. Hard paywalls (e.g. Financial Times)

The name says it all in the case of hard paywalls. Users cannot read any content (at least not in full) without subscribing and will have their pathway immediately blocked. The restrictive nature of hard paywalls may limit the number of potential subscribers, particularly as the approach isn’t tailored to specific audiences and behaviors.

Publishers that implement hard paywalls rely on a high amount of loyal regular users, which means they are probably more likely to specialize in specific fields. For example, this model can work for trade magazines and resources because they have more of a niche, loyal audience.

However, there are shortfalls that come with the hard paywall. For example, readers without a keen interest in the product will typically slip away quickly after first seeing the paywall message. And they are unlikely to return.

2. Freemium paywalls (e.g. Der Spiegel)

With a freemium paywall, a publisher lets readers have access to specific content for free. Here, publishers select premium content that is placed behind the paywall, while other content is freely available. Sometimes a publisher will select some of their biggest stories and features and free them up to non-subscribers, hoping this will then entice them to hit the subscribe button.

Take for example Der Spiegel, which offers different packages for both digital and print subscriptions. These are often tailored to different devices, like mobile and tablet. Some subscription plans can also provide users with additional bonuses like ebooks, tickets to thematic events, and more. This type of investment in engagement has translated into strong brand loyalty for German audiences.

3. Metered paywalls (e.g. The Economist)

Metered paywalls work in a similar way to freemium paywalls and there are a lot of freemium/ metered hybrid walls out there. A typical metered paywall gives readers access to a fixed number of free articles during a specified time period. If they want to read more, they have to subscribe. The issue with this model is that readers sometimes get accustomed to the free content and convince themselves that becoming subscribers isn’t worth it, as they already get enough for free.

Sometimes these publishers — such as The New York Times, The Economist, and Wired — require a registration to read the free content as a middle stage in the customer journey in an effort to convert these casual readers into paid subscribers. Registered readers become known users. Therefore, it becomes much easier for publishers to keep them engaged and target them with tailored offers. This is currently developing into an industry standard and is in line with a trend where the logged-in status will become much more common. Again: good for publishers.

Metered paywalls are those most impacted by Chrome’s update. Some readers have long used incognito mode to dodge metered paywalls. As the publisher can’t track incognito users, the site assumes that the reader is a new visitor and resets the meter to zero.

One of the most limiting things about these three more traditional types of paywall, and something they all share in common, is that each paywall behaves the same way regardless of who interacts with the site. They also put the content first rather than the user, placing the burden of generating subscriptions on the content alone, which in turn ignores the huge boosts in subscription growth that data-driven, real-time personalisation can offer.

4. Dynamic paywalls (e.g. The Wall Street Journal)

A dynamic paywall works by understanding reader behavior in real time and tailoring the online experience based on their needs. Essentially, it is designed to reach audience members who display behaviour that could suggest a liking for a publisher and a likelihood of subscribing.

This means the paywall block might appear faster for readers who spend a lot of time interacting with content in order to try to encourage them to register and eventually subscribe. If a reader only visits a publisher occasionally, they might get access to more free content in order to gradually build an affinity which could lead to them eventually signing up. Readers will also be served tailored free content based on their unique interests. Basically, there isn’t a one-size-fits-all approach and this is what makes a dynamic paywalls stand out from the pack.

The thinking is that this data-focused strategy should find the people most likely to subscribe and give publishers flexibility to target consumers in different ways. A dynamic paywall can optimize your audience and traffic while maximising your revenue potential, with publishers such as The New York Times and Wall Street Journal crediting dynamic paywalls for driving substantial subscriptions growth.

Additionally, a dynamic paywall applies machine learning to raw data to provide publishers with in-depth insight about each individual reader and provide them with a personalized experience that is generated in real time as they browse the site. A dynamic paywall will also often have a propensity model that can categorize readers automatically according to their likelihood to subscribe.

Sure, some publishers will choose to maintain their conventional (or, some might say, old fashioned) paywalls. This may be because they don’t have the technology to execute any other way.

However, forward looking publishers understand the need to find a new business model that drives long lasting engagement from being more dynamic. So, in light of this Chrome news, publishers should look at the change as an opportunity to re-evaluate their current paywall model. It might be time to rethink the paywall strategy as one based on personalization to drive sustainable long term customer relationships.

Advertising | Featured Post | Revenue

Beyond subscriptions: Redefining the value exchange between audience and publisher

August 29, 2019 Chris M. Sutcliffe – Independent Media Reporter

Publishers are pouring their hopes into subscriptions and memberships. That’s understandable. Consumers are exhibiting a (slowly) rising propensity to pay for digital news, which analysts hope heralds a return to the halcyon era in which subscription revenue was the basis of many newspaper and magazine P&Ls. Digital subscriptions offer the additional benefit of copious user data collection, which also buoys their advertising business as well.

The New York Times’ 4.7 million-strong subscriber base has given many publishers hope that subscriptions can work. Although the Los Angeles Times’ recently-revealed figures make it apparent that access to a large enough audience isn’t enough on its own if the renewal rate isn’t high.

However, even the most diehard optimists and proponents of subscription revenue have to admit that subscriptions alone are not a universal panacea to the need for digital revenue. Only a relatively small proportion of people are willing to pay for online news and only likely to pay for a single news subscription As the latest Digital News Report states: “the question of whether people will ever pay for an online news subscription has evolved into a question about how many subscriptions people will pay for.” The report concludes that, at least for the time being, the answer appears to be “one.”

Worse still, the report finds that the proportion of people willing to pay has not grown significantly in the past few years. This suggests that there is effectively a hard cap on how many people will ever pay for digital news. Those other consumers, effectively unwilling or unable to respond to requests for donations or subscriptions, present a problem. So, as cash-strapped publishers search for new sources of revenue, the question arises: How do you monetize the un-monetizable?

Information exchange

Some publishers have attempted to redefine the value exchange for the consumers that they don’t believe they can convert to paid subscriptions. Instead, they ask them to provide raw information in exchange for access. Some publishers in India, for instance, have asked users who arrive on the page to complete an action in exchange for the content. Google’s Madhav Chinnappa told me:

“[The idea] came actually from a group of students. They saw these moves to subscription and their concern in India was ‘what happens if all the good content goes behind a paywall, what happens from a democratic perspective.’ Yet they understand why publishers are doing that. So they said ‘is there a way to try and actually unlock content in a value transfer that isn’t around money?
“Their idea was creating a platform where publishers would allow access to their content for an action on the part of the user, something like labeling an image. I think someone described it as almost like a Mechanical Turk for access to content. I thought this was really clever because it they were coming at it from a point of making sure that there’s access to this information, but understand that it needs to be a value transfer.”

Other publishers worldwide offer access to content in return for answering a survey or providing some personal information. The Financial Times, for instance, has experimented with offering visitors the opportunity to answer questions around brand awareness for access.

This approach has the benefit of allowing the FT to extrapolate from that data its audience’s likelihood to buy from a brand, which it can then use to bolster its advertising sales pitch. Four years ago (which may as well be the Cretaceous period of digital publishing given how much has changed since then), Google estimated that publishers employing a Google Consumer Survey could earn $.05 every time a site visitor answers a survey question.

However, developments around GDPR and increased public awareness of data privacy have re-established the value of the publisher when it comes to user data. Thus, the potential value of those answers has increased. As ever, the devil is in the details when it comes to schemes like this. Really, the execution of an interruptive survey can make or break the establishment of a value exchange in the mind of the audience.

One-offs

The focus on long-term subscriptions is, as discussed earlier, a smart one on the part of publishers who command a serious share of the market. However, smaller publishers face a choice between going incredibly niche (effectively becoming the only game in town for a particular bit of information) or finding other ways of generating direct consumer revenue.

The Guardian, with its exhortation at the end of articles for its readers to support the paper, has seen success with one-off donations. Of the one million people who chose to contribute, 600,000 were one-off donations.

It is notable, however, that even Wikipedia has had a hard time convincing its audience to pony up and support the site through donations. That is despite ranking in the top ten websites by traffic and offering users a slew of ways to pay. This suggests that a campaign that encourages one-off donations is a Sisyphean task, and one that carries more inherent risk than a regular subscription.

Still, just as some publishers are attempting to redefine the value exchange by offering access in exchange for information, other organizations are attempting to make one-off payments more viable. Axate, for instance, which allows users to pay funds into an online wallet that can then be used to buy access to individual articles, is already being used by popular sites including Popbitch.

Axate’s CEO Dominic Young said that the long-term value exchange of hard paywalls doesn’t work for many consumers of digital news: “Our observation about the market is… the consumer behavior is strongly driven by habit. Media consumption generally exists in a kind of casual part of most people’s [habits], in the same place as cups of coffee. In other words, people casually but frequently buy, but very rarely make commitments. You don’t subscribe to Starbucks.”

However, Axate joins a long line of those who have tried to make micropayments work for the media business. So, while there’s debate over the terminology of the one-off payment (with ‘tips’ and ‘donations’ both carrying a sort of semantic weight that puts some publishers off), the reality is that some consumers would welcome an easy way to have one-off access.

Off the wall

Beyond those quite reasonable attempts to change the value exchange, there are others worth noting. Traditionally, content consumers who opt not to pay directly have been monetized through advertising. However, despite improvements over the past few years, the ad ecosystem has been stacked against individual publishers.

It’s a situation that has been exacerbated by the rise of ad-blockers. In February of this year the Internet Advertising Bureau UK commissioned YouGov to conduct a survey on ad-blocking, and found that roughly 22.6% of adults in the UK choose to block ads, a figure that has remained steady for the previous three years. And in the US, nearly 26% of internet users (and climbing) block ads. Meanwhile, an Association of Online Publishers’ survey estimated that adblocking was costing UK publishers “more than £18.4m in 2018, up by more than a third from £13.7m in 2017”.

In this well-reasoned post from February 2018, Salon noted that “with the increasing popularity of ad-blocking technology, there is even more of a disintegration of this already-tenuous relationship; like most media sites, ad-blockers cut deeply into our revenue and create a more one-sided relationship between reader and publisher.”

Salon took an unusual step in an attempt to re-establish an equitable value exchange for audiences. They asked consumers to allow Salon to use their computing power while they were on the site to mine crypto currency. This made headlines at the time, with responses noting variously that it was a controversial yet brave attempt to find a new revenue stream. (Mind you, other less courteous sites had been doing exactly the same without informing their users.)

However, despite all the noise at the time, Salon has since moved to offering ad-free premium offerings. Its subscription offerings range from a year in duration to one-hour long.

Walled-in

Unfortunately, news subscriptions – and the move to harder paywalls – do not serve the vast majority of news publishers well. Their widespread adoption may well encourage more people to pay for access to news content, but it will be the largest publishers who benefit from that increased propensity in the short to medium term.

For others, efforts to redefine the value exchange between content creator and consumer – whether through information exchange, in one-off payments, or anything else – are essential in order to learn how to monetize seemingly un-monetizable audiences.

Industry-Research

Journalists are worried about the future of journalism

July 23, 2019 David Gosen, CCO—Cxense

Journalism has faced a number of challenges over the past few years and there doesn’t seem to be an end in sight. The duopoly has long been seen as one of the biggest threats to the journalism industry. However, according to our “Don’t stop the press” survey of 153 national, business, and trade journalists across the US, UK, and Europe, only 21% felt that this was a major concern.

Other factors such as the decline of quality, reluctance to pay for content, fake news and reliance on advertising revenue were all considered a bigger threat. In particular, shrinking newsrooms has a major effect on the industry, affecting both the quantity and quality of the output of journalists.

The impact of technology

Technology has been a driving factor for the growth of the news industry and has allowed us to spread information far and wide. It gives journalists the power to share the latest news with all corners of the globe and is a hugely important resource.

However, although there are many benefits with the growth of technology in the space, it has also had its drawbacks. Readers are reluctant to pay for digital content, which has put additional strain on journalism. More than half of journalists cited this as a top threat to their job.

However, 90% of journalists feel that technology has ultimately had a positive effect on their industry and has created a number of new opportunities. It’s allowed them to understand their audiences better, produce content that is more likely to engage readers and collaborate with the commercial team to create content that will drive ad revenue and subscriptions.

Journalists understand the need for paid content

Ultimately, journalists understand that their content needs to be paid for with a combination of ad revenue and subscriptions. Subscription strategies are a priority for publishers. In fact, according to Reuters Institute, 52% of publishers said building a subscription audience will be their top business priority in 2019. According to our research, an almost equal number of journalists like paywalls and understand that they are needed, compared to those that don’t like them but think they are necessary. Only 10% thought all content should be free to access.

However, quality journalism requires funding. The publishing sector is still undecided about the best way to fund its output. Our research clearly shows that some funding models actually undermine journalists’ ability to produce their best work. To combat this, media companies and their journalists need to work together to create a sustainable, best-in-class product that provides a guarantee of sustained, quality output, job security, and satisfaction—something most journalists agreed in this research, was sadly lacking.

When looking at the types of content that are currently produced, the research showed that journalists believe that ad revenue-based models favor click-bait, short-form content (67% agree), while subscription-based models support longer-form, quality journalism (84% agree). This indicated that journalists understand that paywalls are necessary to protect journalism in the long term, while still allowing them to drive revenue.

Concerns about the future

The majority of journalists felt seriously concerned for the future of the industry (78%). Their other key concerns included the poor quality of journalism, the spread of fake news, the lack of funding of online media brands, and the decreasing number of newsrooms. In addition to this, 83% of journalists believe that they have poor job security which is mainly driven by consumers reluctance to pay for digital content.

Although this may seem to paint a bleak picture for the future of journalism, our research shows that publishers are working hard to adapt to these pressures. There is a drive towards the introduction of more sustainable funding models which support long and short-form content, ultimately providing a better, more prosperous future for the industry.

Featured Post | Revenue

Thinking inside the box: A look at news, niche, and inspired subscription strategies

June 13, 2019 Chris M. Sutcliffe – Independent Media Reporter

For the foreseeable future, publishers are pinning their hopes on digital subscription, on reigniting the direct relationship they initially lost in the initial pile into digital publishing. A recent study from the Reuters Institute for the Study of Journalism found that 69% of US and European publishers employ some form of paywall around their content, with the vast majority following a metered or freemium model.

Regardless of which model of subscription or membership each outlet has deployed, they each have similar challenges when it comes to the acquisition and retention of users. In that sense they are very similar to other subscription-based products in the entertainment space, from the OTT video services to the innumerable video games subscription services that have been launched in the last year.

The challenges are especially acute for news publishers, however, since news has become a commodity. The news market is flooded with free alternatives and news is not the subscription product most consumers opt for.

We find only a small increase in the overall numbers paying for any online news, and even in countries with higher levels of payment, the vast majority only have ONE online subscription – suggesting that ‘winner takes most’ dynamics are likely to be important. 2/7 pic.twitter.com/5AC0Jj2JrM
— Rasmus Kleis Nielsen (is offline, taking a break) (@rasmus_kleis) June 12, 2019

Boxed goods

However, just as the challenges are similar, there are success stories around other subscription products that news publications should consider emulating in their own approach to consumers.

One of those increasingly lucrative consumer subscription products is that of the subscription box. These generally take the form of a batch of products curated and delivered directly to you monthly, sometimes in partnership with a publisher. The range of products offered spans from apparel to hot sauces to sustainably sourced fruit and vegetables. And consumers are responding: Royal Mail predicts the market will be worth £1bn by 2022, and that over a quarter of the UK population has already signed up for a subscription box.

Katie Vanneck-Smith is the founder of Tortoise, a “slow journalism” publisher with a focus on membership. She told me that publishers can take valuable lessons away from the rise of products like subscription boxes, and that publishers have “only just started to catch up with the consumer behaviours in the industry”. So what can news publishers learn from the growth of those products, particularly around engaging and retaining subscribers?

Curation as a service

The value of a subscription box lies in the fact that its contents have been specially selected for the consumer base. Subscribers trust that the brand behind the box has the expertise required to choose only the best goods to serve up. And this is doubly true when the box contains luxury products rather than staple goods. Boxes like Loot Crate and Stitch Fix trade off the fact that they have the connections and knowledge to deliver products that are relevant to the receiver. Crucially, they both play up the fact that human editors are the ones ultimately doing the curation, rather than just an algorithm.

In that sense, those subscription offerings are very similar to products from high-end publishers. This includes The Times & Sunday Times, which make the curation of stories relevant to their audiences a core tenet of products like The Brief. Both leverage the fact that, in a sea of products, there is value in having an expert pick out only the best ones on your behalf.

Churn is a fact of life, so cater for it

It typically costs around five times more to acquire a new subscriber than to retain an existing one. That’s why so many publishers are avidly focused on the development of their own internal engagement scores, to determine when people are likely to jump ship and hopefully to intercede. The Times in particular has invested a huge amount of money in reducing churn along every part of the process, but it is effectively a universal concern among subscription-based products.

However, while the quality of the provided service is ultimately the best guarantor of user retention, sometimes factors outside of a publisher’s control will inevitably cause people to consider dropping off. In that case, as with subscription boxes, publishers need to offer solutions that cater to their audience’s changing situation. Ecommerce platform Cratejoy found that customers typically gave financial reasons as the cause for cancelling a subscription box, and advises that subscription boxes offer a “downgrade” option.

Increasingly, publishers are doing the same. They offer flexible options or discounts to the subscribers who contact them to cancel. Some publishers are also considering a wider rollout of a pause option for subscribers. This has the dual benefit of keeping them within the logged-in ecosystem for marketing purposes while also negating the high cost of reacquiring a lapsed subscriber.

Have a mission

Subscription packages like ODDBOX make a social mission part of their sales strategy: much of its messaging is based around the notion that food wastage is a significant issue, and that subscribing is the right thing to do to combat a problem. Similarly, the Guardian found that the rhetoric it employed around its membership scheme had a significant impact, and that choosing to support open access to journalism for everyone was frequently cited as one of the most important reasons people chose to donate.

Notably, when the Guardian reached its milestone of a million paying users, it chose to change the messaging from one of survival to one of sustainability. Consequently, it saw its best week ever in terms of donations. This ran counter to internal misgivings that fewer people would choose to support it no longer appeared in peril.

The fourth subscription

At the World News Media Congress in Glasgow, co-editor of the Innovation in News Media World Report Juan Senor suggested that a consumer is likely to pay for four subscription services. The first two would likely be entertainment services, the third a general news subscription, and the fourth to a niche site they have a personal interest in.

While people typically feel affinity to newsbrands, the trend towards personalization of content means that publishers can typically serve up content tailored specifically to them. Effectively, they are increasingly hybrids of the third and fourth subscriptions. For example, The Telegraph recognized that its rugby content was of particular interest to its audience. So, it recently made all its content around the sport a key part of its subscription proposition, one of only three types of article to sit exclusively behind the paywall.

When it comes to marketing that specific content, publishers could do much worse than to emulate the techniques employed by subscription boxes, which are by their nature niche. The products themselves – news and goods – are very different in nature, but the lessons around messaging and retention are universal.

Innovation | Perspectives

Not just for news: HBR’s evergreen approach to newsletters

April 1, 2019 Nicole Torres, Senior Associate Editor – Harvard Business Review

The first successful American newspaper was founded in 1704 by a postmaster named John Campbell. Called the Boston News-Letter, it was not unlike many email newsletters today: Campbell wrote “a summary of the most noteworthy items of information that passed through his post office and circulat[ed] that newsletter to a small group of friends.” As journalism historian Christopher Daly writes in his book Covering America, Campbell “filled his paper with stories that he lifted from London newspapers – supplemented by letters from his friends, news of the comings and goings of ships, public announcements, and some paid advertising.” Campbell didn’t have access to Substack or TinyLetter, but his product – a prototype for American newspapers – should sound familiar to subscribers of modern email newsletters.

As media companies and the public have grown more skeptical of social media platforms over the past few years, email newsletters have seen a resurgence. Publishing companies are being built around them, new publishing tools are gaining momentum, and we’re seeing countless experiments in editorial style, format, and more. But for all that experimentation, much of publishers’ effort around email newsletters has focused on what’s new. That makes sense, given that reporting the news is journalism’s central charge, but it’s only one opportunity that email provides.

Evergreen Approach

At Harvard Business Review, we recently launched a newsletter designed around more evergreen content. We wanted to blend the focused, short-run, “finishable” nature of pop-up newsletters with a more educational, course-like approach. We were inspired by how online learning platforms convey a sense of progression and by The Economist’s Espresso app, which offers the feeling of having completed the day’s news. The result is our 8-week email series on Managing Data Science.

When we started thinking about this project in early 2018, there were already lots of excellent newsletters devoted to data science and machine learning. Many of these, though, focused on technical, business, and societal perspectives. We wanted to cover the challenges that organizations face in actually managing data science work and teams.

A Must Read

HBR was inspired by how online learning platforms convey a sense of progression and by The Economist’s Espresso app, which offers the feeling of having completed the day’s news. The result was an 8-week email series on Managing Data Science.

Based on the success we’ve had with other curated products like our Must Read book series, we hypothesized that readers would prefer a finite series of carefully selected content over an ongoing weekly or monthly newsletter. We interviewed numerous data scientists to better understand the biggest management challenges that they were facing on their teams and to get their feedback on the concept. Then we commissioned and edited eight digital articles that became the heart of our email series. The articles were written by professional data scientists who’ve worked at companies including Google, Apple, Netflix, Stitch Fix, and Coursera. Each email in the series focuses on one theme (like the different types of data scientist), with all eight amounting to something of a mini-course on managing data science.

Following on the newsletter success that publishers including Axios and DealBook have had, we designed our email series to be more than a collection of links to content. Each issue links to one of the eight articles, but also contains what we think of as a “mega-summary” – a 400-word version that basically gives you the gist. It also includes further relevant reading from HBR and other sources, as well as a more lighthearted stat or chart at the bottom to reward readers who make it all the way through.

So far, Managing Data Science has been a success. More than 38,000 people have signed up for the email series, and our open rate is over 40%. We expect the audience to grow substantially throughout 2019.

Popping the Popup Bubble

In our experience, the evergreen-series approach to email has significant advantages in terms of product development, user acquisition, and editorial resourcing. Unlike an event-based pop-up newsletter, we didn’t face pressure to drive signups immediately at launch. We were able to stagger promotion over several months, testing and gathering feedback. This ultimately allowed us to make improvements to the design of the newsletter before promoting it to a larger audience. We’re now able to continue promoting the series and driving engagement with our readers without endlessly creating new content. Instead, we can focus on incrementally improving the series for new subscribers.

We’re not the only ones experimenting with evergreen content in newsletters. The New York Times has given its Smarter Living material regular space in its morning news briefing. Even closer to our experiment, The Information is offering email courses on topics like the future of mobility; Vox.com launched a newsletter on giving to charity at the end of 2018 that followed a similar approach; The Washington Post has a 12-week email series on cooking; and the Pew Research Center recently launched a two-week email course on immigration.

Engagement and Inspiration

These examples as well as our experience suggest that evergreen newsletters can become a critical part of publishers’ strategies. For one thing, email engagement tends to decline over time; short-run newsletters don’t ask readers to sign up in perpetuity. Therefore, they tend to have higher engagement. They also help publishers focus on a particular audience. And that focused relationship is between the publisher and the user, not mediated by social media algorithms. Finally, as mentioned, evergreen newsletters are a chance to take an iterative approach to improving email products. Because the content doesn’t need to be refreshed every day or week, more attention can be spent to continually improving other elements of the experience – such as the subject line – and adjusting where users would most benefit.

Newsletters are only going to become more important for publishers in the coming years. They can take many forms, and news briefings likely will (and should) be the quintessential email product. But email programs don’t always need to emphasize what’s new. They can help users learn about new topics or acquire new skills, too.

About the Authors

Nicole Torres is a senior associate editor at Harvard Business Review. Walter Frick is the deputy editor of HBR.org and will be speaking at DCN Content Everywhere on April 25.

Taking a bite out of Apple News+

March 28, 2019 Chris Pedigo, SVP Government Affairs – DCN

This week, Apple announced a new suite of services including Apple News+ and Apple TV+, subscription services for news and video content respectively. It’s an interesting move for Apple, which excels at creating premium experiences, enjoys strong customer loyalty, and has the ability to potentially deliver audience scale. There are, however, serious questions about the revenue split, consumer relationship, app-market dominance, access to content, and Apple’s long-term commitment to publishers.

While few details are available at this point (particularly about Apple TV+), it appears Apple News+ will cost $9.99 per month with Apple taking a hefty 50% cut and distributing the remainder to all of the participating publishers. Tim Cook did not announce a price point for Apple TV+ but it seems likely to have similar characteristics as Apple News+, including a similar revenue split and distribution structure.

A Lopsided Relationship

With these news services, Apple will control not only the relationship with the consumer, but will also control the data about the consumer. It’s hard enough to build a subscription business without having another company serve as the middleman between the content creator and their audience. Moreover, as New York Times’ CEO Mark Thompson put it, “Bundles always dilute the brand.”

More troubling is the fact that Apple runs the app marketplace itself via the App Store while simultaneously offering a media consumption app that competes with publishers’ branded apps as well as those of other aggregators such as Flipboard. An example of the inherent conflict of interest is that Apple places its own apps front and center, pre-installed on more than a billion phones worldwide. Beyond a glaring competitive advantage, controlling the marketplace and delivery mechanism of its competitors’ apps gives Apple unprecedented insights into the transactions of those companies (think Amazon selling its own brands while seeing everyone of its competitors’ transactions).

Market Monopoly

Apple forcing the reported levels of revenue splits and data terms underscores larger concerns about the dominance of platforms. As Senator Blumenthal, who serves on the Senate Judiciary Committee has stated, “[t]here is much stronger agreement among me and my colleagues that there needs to be more aggressive enforcement action on tech companies.” Senator and presidential candidate Elizabeth Warren (D-MA) recently called for the break-up of Apple and the other platforms. Senator Ted Cruz (R-TX) has long voiced concerns about potential bias of big tech firms. Members of Congress are concerned that big tech platforms have too much influence and are harmful to society. Although Apple has avoided a lot of the privacy gaffes of other tech giants, the fact that Apple can boldly propose such lopsided terms shows how the landscape is perilously tilted in favor of the big platform companies.

Bringing further voice to the concerns raised by policymakers, Spotify filed suit against Apple claiming that Apple “purposely limited choice and stifled innovation.” Spotify claims that Apple uses its platform to disadvantage competitors in the music streaming business, including by taking a 30% cut of subscription revenue. While Apple is not proposing to get into the news business, the Apple TV+ product sounds like Apple will be both distributor and competitor.

And, considering the fact that Apple has expressed concerns in how digital advertising works, it seems an ironic choice for the company to favor advertising-based business models over subscriptions for publishers.

Quick Fix or Long-term Success?

Publishers are also rightly concerned about whether Apple will maintain a long-term commitment to this initiative. Facebook famously changes their terms, goals and algorithms about every six months, which makes it extremely difficult for publishers to build a sustainable business. Other social platforms have rolled out paid incentives to content producers only to withdraw them as soon as the programs are off the ground. Publishers have rightly grown wary of purported platform support.

At the end of the day, Apple needs to make a serious commitment to making distribution work for high-quality news and entertainment. As we have seen in Google and Facebook’s own (hardly altruistic) need to invest in the production of content that their business models undermined, building a model that sustains quality content creation is the bedrock of long-term success.